After its privatization in 1998, the telecommunications sector in Panama has shown a strong growth. Cable & Wireless (a British company) acquired the operation of the national utility. Cable & Wireless improved and expanded a number of services, digitalized all switching stations and upgrading transmission lines to the latest technology. Additionally, four cellular companies are now operating in Panama: Cable & Wireless (England), Telefonica (Spain), Claro (Mexico), and Digicel (Ireland) There are over 500,000 fixed telephone lines in the country, and over 5 million cellular lines, giving Panama one of the highest teledensity rates in Latin America. Panama has today one of the most modern and dynamic telecommunications sectors in Latin America. Main competitors in the market are the United Kingdom, Japan, Sweden, France and Canada.

The competition in the cellular telephony sector opened new opportunities for U.S. exporters of equipment, such as towers and a variety of supporting equipment. Additionally, Cable & Wireless and other companies that recently entered the market continue to modernize the fixed telephone system thus bringing opportunities for exporters of switching equipment, handsets, and a full range of equipment and accessories.

The Government of Panama has embarked upon an expansion of wireless internet access to the general population across the nation. Additionally, there is an ongoing government effort to modernize the telecommunications services in the different public organizations, including hospitals, financial entities, and public universities.

U.S. companies should take advantage of the duty-free access that U.S.-made equipment in this space enjoys due to the recently implemented U.S.-Panama Trade Promotion Agreement. In addition, given the heavy emphasis on ongoing parts and maintenance, U.S. companies should enjoy a competitive advantage over lower up-front cost upstarts from Asia that can’t offer a lower total cost of ownership solution.